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After a nine-month hiatus that made the Chinese games industry nervous, China’s cultural authorities have finally started issuing new permits for native games to be released in the country.
As first reported by Bloomberg, the National Press and Publication Association (China’s cultural regulator of news, print and web publications) approved. 45 titles today. These games are the first games allowed since last July. While the news brings some relief to the Chinese gaming industry, approvals for the 14,000 gaming companies deregistered during the freeze came too late. The last record-breaking approval delay was in 2018, which lasted ten months.
This has helped mitigate recent stock price volatility. Investors have recently been concerned about increasing restrictions on how long underage people can play video games. Last September, Chinese gaming giants Tencent and Netease lost $60 billion in stock value. That’s eight Bethesdas, or nearly an entire Activision Blizzard. Today, shares of Netease and Bilibili (a Chinese video hosting company that also publishes games) are up 8%.
One of the reasons new approvals have taken so long is stricter content restrictions on games that minors can access. Chinese parents were concerned that free-to-play mobile games were negatively affecting their children’s well-being, which had also contributed to the slowdown. Nearly a week later, a gray market of rental accounts emerged, allowing minors to bypass the time limits on the game length of popular titles like Honor of Kings.
With only about 1,200 game licenses issued each year, Chinese game developers are being pushed to double the quality of their games. These regulations have made Chinese game development incredibly competitive, and some savvy companies have tapped into the market of players wanting premium, story-rich experiences to compete for licenses. However, smaller indie developers are struggling significantly with the constant changes in the regulatory landscape.
Only 45 licenses have been granted so far, which is still a tiny percentage of the total number of games allowed to be released in China each year. Hopefully the NPPA can match or surpass the agency’s typical 1,200 or so approvals.